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Colony Bankcorp, Inc. Announces Fourth Quarter Results

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FITZGERALD, Ga., Jan. 26, 2018 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (NASDAQ:CBAN), today reported net income available to shareholders of $579,000, or $0.07 per diluted share for the fourth quarter of 2017 compared to $1,883,000, or $0.22 per diluted share for the comparable 2016 period, while net income available to shareholders for the twelve month period ended December 31, 2017 was $7,540,000, or $0.87 per diluted share compared to $7,180,000, or $0.84 per share for the comparable 2016 period.  During the quarter earnings were negatively impacted $2,041,000, or $0.24 per share due to additional income tax expense resulting from a one-time write down of deferred assets.  As a result of the Tax Reform Act signed by President Trump on December 22, 2017, FASB accounting standards required public companies to write down deferred tax assets to the new tax rate of 21% compared to the old rate of 35%.  Excluding the one-time tax adjustment, earnings for the quarter would have been $2,620,000, or $0.30 per share, while year to date earnings would have been $9,581,000 or $1.11 per share.  Though we were impacted this quarter by the one-time expense to earnings, the lower tax rates will be very positive for future earnings.  Earnings were positively impacted by an increase in net interest income and noninterest income and a reduction in preferred stock dividends and loan loss provision.  "We are pleased to report an outstanding year for Colony, said Ed Loomis, President and Chief Executive Officer.  Excluding the one-time tax adjustment, earnings was 33.44 percent over the prior year, capital remains well-capitalized with all regulatory requirements and asset quality reflects continued improvement from a year ago.   As we look forward to 2018, the new tax reform will result in improved earnings due to the lower tax rate.  We continue to explore options to improve operating efficiencies and to increase loan growth, which in turn will further enhance shareholder value."

Capital

Colony continues to maintain a strong regulatory capital position to be categorized as "well-capitalized" by regulatory benchmarks.  At December 31, 2017, the Company's tier one leverage ratio, tier one ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.89 percent, 14.64 percent,15.56 percent and 11.78 percent, respectively, compared to 10.29 percent, 15.50 percent, 16.64 percent  and 11.32 percent, respectively, at December 31, 2016.  The Company's capital ratios were all in excess of regulatory minimums required to be classified as "well-capitalized."

Net Interest Margin 

During the fourth quarter of 2017, the Company reported net interest income of $9.92 million and a net interest margin of 3.50 percent compared to $9.57 million and 3.48 percent, respectively, for fourth quarter 2016, while net interest income YTD 2017 was $39.04 million and a net interest margin of 3.46 percent compared to $38.11 million and 3.51 percent, respectively, for the same comparable period  in 2016.  As we shift more dollars out of lower yielding investments into higher yielding loans, we should realize net interest margin improvement.   Our focus in 2018 will be on loan and deposit pricing along with loan growth to maintain or improve its' net interest margin.

Asset Quality

Asset quality remains solid with marked improvement from a year ago.  Substandard assets that include non-performing assets totaled $26.19 million at December 31, 2017 compared to $33.23 million at December 31, 2016.  Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 20.18 percent at December 31,2017compared to 25.67 percent a year ago.  Non-performing assets decreased significantly from the year ago period to $11.76 million or 1.53 percent of total loans and other real estate owned as of December 31, 2017.  This compares to $18.79 million or 2.47 percent at December 31, 2016.       

Other real estate ("OREO") totaled $4.26 million at December 31, 2017 compared to $6.44 million at December 31, 2016.   Though these levels remain slightly elevated, we continue to work diligently to dispose these properties at fair value.  There are several pending transactions that we anticipate closing in the near future to further reduce our OREO holdings. 

In the fourth quarter of 2017 net charge-offs were $525 thousand, or 0.07 percent of average loans as compared to net charge-offs of $280 thousand, or 0.04 percent of average loans in fourth quarter 2016, while YTD 2017 net charge-offs were $1,806 thousand, or 0.24 percent of average loans compared to $743 thousand, or 0.10 percent of average loans for the comparable 2016 period.  The loan loss reserve was $7.51 million or 0.98 percent of total loans on December 31, 2017 compared to $8.92 million or 1.18 percent at December 31, 2016.  Loan loss reserve methodology resulted in $55 thousand  loan loss provision for three months ended December 31, 2017  compared to no provision for the comparable 2016 period, while YTD 2017 provision for loan losses was $390 thousand compared to $1,062 thousand for the comparable 2016 period.

Noninterest Income

Total noninterest income increased in the comparable periods as noninterest income for twelve months ended December 31, 2017 was $9.73 million compared to $9.55 million in the comparable 2016 period, or an increase of 1.89 percent.  Secondary mortgage fee income increased $177 thousand or 25.95 percent, service charges on deposits increased $160 thousand or 3.71 percent and debit card interchange fees increased $179 thousand or 7.41 percent to primarily account for the increase.  Offset to these increases was gains on the sale of securities in 2016 of $385 thousand compared to no gains in 2017.    

Noninterest Expense

Total noninterest expense decreased in the comparable periods as noninterest expense for twelve months ended December 31, 2017 was $33.86 million compared to $34.07 million for the comparable 2016 period, or an decrease of 0.63 percent.  Salaries and employee benefit expenses increased 4.00 percent, occupancy expense remained flat and other noninterest expense decreased 8.01 percent for the comparable periods.  The efficiency ratio improved to 69.19 percent for twelve months ended December 31, 2017 compared to 71.81 percent for the comparable 2016 period.   The company continues to explore opportunities to improve its' operating efficiency.

Colony Bankcorp, Inc. is a bank holding company headquartered in Fitzgerald, Georgia that consists of one operating subsidiary, Colony Bank.  Colony Bank conducts a general full service commercial, consumer and mortgage banking business through twenty-seven offices located in the central, southern and coastal Georgia cities of Albany, Ashburn, Broxton, Centerville, Columbus, Cordele, Douglas, Eastman,
Fitzgerald, Leesburg, Moultrie, Quitman, Rochelle, Savannah, Soperton, Statesboro, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins, Georgia. 

Colony Bankcorp, Inc. Common Stock is quoted on the Nasdaq Global Market under the symbol "CBAN".

Certain statements contained in the preceding release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified.  In addition, certain statements may be contained in the Company's future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements.  Forward-looking statements speak only as of the date on which such statements are made.  The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.    Readers are cautioned not to place undue reliance on these forward-looking statements.

Consolidated Balance Sheets Colony Bankcorp, Inc.          
(in thousands)          
           
  December 31, 2017   December 31, 2016   December 31, 2015
  (unaudited)   (audited)   (audited)
ASSETS          
Cash and Cash Equivalents          
Cash and Due from Banks $ 23,145     $ 28,822     $ 22,257  
Interest-Bearing Deposits     34,668         46,345          38,615  
Investment Securities          
Available for Sale, at Fair Value     354,247         323,658         296,149  
Federal Home Loan Bank Stock, at Cost     3,043          3,010         2,731  
Loans     765,284         754,283         758,636  
Allowance for Loan Losses     (7,507 )       (8,923 )       (8,604 )
Unearned Interest and Fees     (495 )       (361 )       (357 )
      757,282         744,999         749,675  
Premises and Equipment     27,639         27,969         26,454  
Other Real Estate     4,256         6,439         8,839  
Other Intangible Assets     45         81         116  
Other Assets     28,430         29,119         29,313  
Total Assets $   1,232,755     $   1,210,442     $   1,174,149  
           
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Deposits          
Noninterest-Bearing $   190,929     $   159,059     $   133,886  
Interest-Bearing     877,057         885,298         877,668  
      1,067,986         1,044,357         1,011,554  
Borrowed Money          
Subordinated Debentures     24,229         24,229         24,229  
Other Borrowed Money     47,500         46,000         40,000  
      71,729         70,229         64,229  
           
Other Liabilities     2,717         2,468         2,909  
           
Stockholders' Equity          
Preferred Stock, Stated Value $1,000 a Share;          
Authorized 10,000,000 Shares, Issued 0 Shares          
as of Dec. 31, 2017, 9,360 as of Dec. 31, 2016 and          
18,021 as of Dec. 31, 2015, Respectively    -         9,360         18,021  
Common Stock, Par Value $1 a share; Authorized          
20,000,000 Shares, Issued 8,439,258 Shares as of          
Dec. 31, 2017, Dec. 31, 2016 and Dec. 31, 2015          
Respectively     8,439         8,439         8,439  
Paid in Capital     29,145         29,145         29,145  
Retained Earnings     59,231         51,466          44,286  
Accumulated Other Comprehensive Loss, Net of Tax     (6,492 )       (5,022 )       (4,434 )
      90,323         93,388         95,457  
Total Liabilities and Stockholders' Equity $   1,232,755     $   1,210,442     $   1,174,149  
           


Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
 
  Quarter   Year-to-Date
  Three Months Ended   Twelve Months Ended
  12/31/2017   12/31/2016   12/31/2017   12/31/2016
  (unaudited)   (audited)   (unaudited)   (audited)
Interest Income              
Loans, Including Fees $   9,730   $   9,808   $   38,614   $   38,943
Deposits with Other Banks     66       45       232       124
Investment Securities              
U.S. Government Agencies     1,786       1,286       6,718        5,264
State, County and Municipal     28       30       115       127
Corporate Debt     29      -       88      -
Dividends on Other Investments     41        34       150       131
      11,680       11,203       45,917       44,589
Interest Expense              
Deposits     1,199       1,201       4,758       4,781
Federal Funds Purchased    -       1       3       1
Borrowed Money     558       432       2,112       1,701
      1,757       1,634       6,873       6,483
Net Interest Income     9,923       9,569       39,044       38,106
Provision for Loan Losses     55       -       390       1,062
Net Interest Income After Provision for Loan Losses     9,868       9,569       38,654       37,044
               
Noninterest Income              
Service Charges on Deposits     1,152       1,122       4,467       4,307
Other Service Charges, Commissions and Fees     740       698       3,040       2,802
Mortgage Fee Income     230       175       859       682
Securities Gains (Losses)     -       -      -       385
Other     394       397       1,368       1,377
      2,516       2,392       9,734       9,553
Noninterest Expense              
Salaries and Employee Benefits     4,756       4,658       19,223       18,483
Occupancy and Equipment     983       1,003       3,948       3,970
Other      2,713       3,169       10,689       11,620
      8,452       8,830       33,860       34,073
               
Income Before Income Taxes     3,932       3,131       14,528       12,524
Income Taxes     3,353       944       6,777       3,851
Net Income     579       2,187       7,751       8,673
               
Preferred Stock Dividends    -       304        211       1,493
               
Net Income Available to Common Shareholders (1) $   579   $   1,883   $   7,540   $   7,180
Net Income Per Share of Common Stock              
Basic $   0.07   $   0.22   $   0.89   $   0.85
Diluted $ 0.07   $   0.22   $   0.87   $   0.84
Cash Dividends Declared Per Share $ 0.025   $ -   $   0.100      -
Weighted Average Basic Shares Outstanding   8,439,258     8,439,258     8,439,258     8,439,258
Weighted Average Diluted Shares Outstanding   8,639,258     8,553,937       8,633,581       8,513,295
               
(1) Excluding one-time tax adjustment for deferred taxes, net income would have been $2,620, or $0.30 per share and
$9,581, or $1.11 per share, respectively, for fourth quarter 2017 and YTD 2017.
               


COLONY BANKCORP, INC
FINANCIAL HIGHLIGHTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
                 
  QUARTER ENDED   YEAR-TO-DATE  
EARNINGS SUMMARY 12/31/2017   12/31/2016   12/31/2017   12/31/2016  
Net Interest Income $ 9,923   $ 9,569   $ 39,044   $ 38,106  
Provision for Loan Losses     55        -       390       1,062  
Non-interest Income     2,516       2,392       9,734       9,553  
Non-interest Expense     8,452       8,830       33,860        34,073  
Income Taxes     3,353       944       6,777       3,851  
Net Income     579       2,187       7,751       8,673  
Preferred Stock Dividend    -       304        211       1,493  
Net Income Available to                
Common Shareholders **     579       1,883       7,540       7,180  
** Excluding one-time tax adjustment for deferred taxes, net income would have been $2,620 and $9,581,  
respectively, for fourth quarter 2017 and YTD 2017.              
                 
  QUARTER ENDED   YEAR-TO-DATE  
PER COMMON SHARE SUMMARY 12/31/2017   12/31/2016   12/31/2017   12/31/2016  
Common Shares Outstanding     8,439,258        8,439,258       8,439,258       8,439,258  
Weighted Average Basic Shares     8,439,258       8,439,258       8,439,258       8,439,258  
Weighted Average Diluted Shares     8,639,258       8,553,937       8,633,581       8,513,295  
Earnings Per Basic Share (b) $0.07   $0.22   $0.89   $0.85  
Earnings Per Diluted Share (b)** $0.07   $0.22   $0.87   $0.84  
Cash Dividends Declared Per Share $0.025     -   $0.100     -  
Common Book Value Per Share $10.70   $9.96   $10.70   $9.96  
Tangible Common Book Value Per Share $10.70   $9.95   $10.70   $9.95  
** Excluding one-time tax adjustment for deferred taxes, earnings per diluted share would have been $0.30  
and $1.11, respectively, for fourth quarter 2017 and YTD 2017.   
                 


               
  QUARTER ENDED   YEAR-TO-DATE
OPERATING RATIOS (1) 12/31/2017   12/31/2016   12/31/2017   12/31/2016
Net Interest Margin (a) 3.50%   3.48%   3.46%   3.51%
Return on Average Assets (b)** 0.19%   0.64%   0.63%   0.62%
Return on Average Total Equity (b)** 2.52%   7.60%   8.28%   7.17%
Efficiency (c) 67.71%   73.57%   69.19%   71.81%

**Excluding one-time tax adjustment for deferred taxes, return on average assets would have been 0.87% and 0.80%, respectively for fourth quarter 2017 and YTD 2017.  Return on average total equity would have been 11.41% and 10.52%, respectively, for fourth quarter 2017 and YTD 2017.
    
(1)  Annualized
(a)  Computed using fully taxable-equivalent net income
(b)  Computed using net income available to shareholders
(c ) Computed by dividing non-interest expense by the sum of fully taxable-
       equivalent net interest income and non-interest income and excluding
       security gains/losses.

    QUARTER ENDED
  ENDING BALANCES   12/31/2017   12/31/2016
Total Assets   $   1,232,755   $   1,210,442
Loans, Net of Reserves       757,281       744,999
Allowance for Loan Losses       7,507       8,923
Intangible Assets       45       81
Deposits       1,067,986       1,044,357
Common Shareholders' Equity       90,323       84,028
Common Equity to Total Assets     7.33%     6.94%
Total Equity       90,323       93,388
Total Equity to Total Assets     7.33%     7.71%
         


    QUARTER ENDED   YEAR-TO-DATE
AVERAGE BALANCES   12/31/2017   12/31/2016   12/31/2017   12/31/2016
Total Assets   $   1,211,440   $   1,182,003   $   1,200,631   $   1,163,863
Loans, Net of Reserves       760,830       760,170       754,112        751,778
Deposits       1,040,208       1,009,258       1,030,485       993,705
Common Shareholders' Equity       91,884       85,787       91,045       83,579
Total Equity       91,884       99,169       91,045       100,114
                 
    QUARTER ENDED   YEAR-TO-DATE
ASSET QUALITY   12/31/2017   12/31/2016   12/31/2017   12/31/2016
Nonperforming Loans   $   7,503   $   12,350   $   7,503   $   12,350
Nonperforming Assets       11,759       18,789       11,759       18,789
Substandard Assets       26,189       33,227       26,189       33,227
Net Loan Chg-offs (Recoveries)       525        280       1,806       743
Reserve for Loan Loss to Total Loans     0.98%     1.18%     0.98%     1.18%
Reserve for Loan Loss to Non- performing Loans   100.07%     72.25%     100.07%     72.25%
Reserve for Loan Loss to Non-performing Assets   63.85%     47.49%     63.85%     47.49%
Net Loan Chg-offs (Recoveries)                
to Avg. Total Loans     0.07%     0.04%     0.24%     0.10%
Nonperforming Loans to Total Loans     0.98%     1.64%     0.98%     1.64%
Nonperforming Assets to Total Assets     0.95%     1.55%     0.95%     1.55%
Nonperforming Assets to Total Loans                
And Other Real Estate     1.53%     2.47%     1.53%     2.47%
Substandard Assets to Tier One Capital                
and Allowance for Loan Losses     20.18%     25.67%     20.18%     25.67%
                 


Quarterly Comparative Data (in thousands, except per share data)        
             
  4Q2017 3Q2017 2Q2017 1Q2017 4Q2016  
Assets $   1,232,755 $   1,195,393 $   1,198,449 $   1,208,765 $   1,210,442  
Loans     757,281     761,639     767,069     751,056     744,999  
Deposits     1,067,986     1,020,263     1,026,538     1,044,231     1,044,357  
Common Shareholders' Equity     90,323     91,602     88,992     85,861      84,028  
Total Equity     90,323     91,602     88,992     85,861     93,388  
Net Income     579     2,622     2,433     2,117     2,187  
Net Income Available to            
Common Shareholders**     579     2,622     2,433     1,906     1,883  
Net Income Per Basic Share**   0.07   0.31   0.29   0.23   0.22  
             
Key Performance Ratios 4Q2017 3Q2017 2Q2017 1Q2017 4Q2016  
Return on Average Assets (1)   0.19%   0.88%   0.81%   0.63%   0.64%  
Return on Average Total Equity (1)   2.52%   11.57%   11.10%   8.11%   7.60%  
Common Equity to Total Assets   7.33%   7.66%   7.43%   7.10%   6.94%  
Total Equity to Total Assets   7.33%   7.66%   7.43%   7.10%   7.71%  
Net Interest Margin   3.50%   3.50%   3.49%   3.35%   3.48%  
             
(1) Computed using net income available to shareholders   
**Excluding one-time tax adjustment for deferred taxes, net income available to shareholders would be $2,620, or $0.31
per basic share.            
             

Contact: Terry L. Hester
Chief Financial Officer
(229) 426-6000 (Ext 6002)

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